IPO Watch: LinkedIn Sets IPO Terms, Worth Over $3 Billion (LNKD, GS, MHP, SAP)

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LinkedIn Corporation is now much closer to coming public as it has set the terms for its initial public offering.  The company has set the initial offering terms at 7.84 million shares or 9.016 million shares if the overallotment is fully allocated.  Without the effects of the overallotment, LinkedIn the company is selling 4,827,804 shares and LinkedIn holders are selling 3,012,196 common shares.  The initial price target range is being set at $32.00 to $35.00 per share. The stock will trade under the “LNKD” ticker and will trade on the New York Stock Exchange. 

As a reminder, LinkedIn was listed as one of our own Top 17 IPOs to Watch in 2011.

After the offering there will be A-shares and B-shares. The rights of the holders of Class A common stock and Class B common stock will be identical, except for voting and conversion rights.  Each A-share will get one vote per share; each B-share will get 10 votes and can convert at any time into one A-share.  Class-B shares will represent approximately 99.1% of the voting power and will be held by co-founder and Chairman Reid Hoffman, and that will represent about 21.7% of the total voting power of outstanding capital stock following this offering.

The combined Class-A and Class-B shares outstanding after this IPO will be 94,498,627 shares.  If we just straight-line the math, the market cap at the mid-point of the price range will be about $3.165 billion.

Venture investors include Goldman Sachs Group (NYSE: GS), McGraw Hills Companies (NYSE: MHP), and a unit of SAP AG (NYSE: SAP).

The underwriters are listed as Morgan Stanley, BofA Merrill Lynch, and J.P. Morgan as the book runners.  Co-managers are listed as Allen & Co. and also UBS Investment Bank.  

LinkedIn claims more than 100 million members in over 200 countries and territories. From 2009 to 2010, net revenue increased $123.0 million, or 102%, net income increased $19.4 million, or 487%, and adjusted EBITDA increased $33.3 million, or 227%. In the three months ended March 31, 2011, net revenue increased $49.2 million, or 110%, net income increased $0.3 million, or 14%, and adjusted EBITDA increased $4.2 million, or 46%, over the three months ended March 31, 2010.
 
The ramifications here are many but LinkedIn will very possibly be the ground-setting tone for Facebook and its ultimate IPO, even if Facebook is valued well above $50 billion as of today.

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LinkedIn’s full amended filing is here.

JON C. OGG

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